Marketing Awareness Questions and Answers

Answer: B

Correct answer: Reference Group

A reference group is any set of people whose opinions a person uses as a guide when forming their own. Asking friends for a recommendation is exactly that. It is one of the strongest influences on buying behaviour, and it is why word of mouth outperforms advertising.

Answer: D

Correct answer: One seller, many buyers

A monopoly is one seller facing many buyers, with no close substitute for the product. The seller therefore sets the price rather than accepting it. One buyer facing many sellers is a monopsony, and one of each is a bilateral monopoly.

Answer: D

Correct answer: selling additional products to an existing customer

Cross-selling offers a customer who already holds one product, say a savings account, a further one such as insurance or a credit card. It is attractive because acquiring a new customer costs far more than deepening an existing relationship.

Answer: A

Correct answer: All existing account-holders

A debit card draws on money already in an account, so the natural target market is everyone who already holds an account - there is no credit risk to assess and no new relationship to establish. That is what distinguishes it from a credit card, which must be sold selectively.

Answer: C

Correct answer: Goal Formulation

Setting specific, measurable targets to be reached by a stated date is goal formulation - the step that turns a general intention into something that can be planned for and measured against. Strategy is how the goals will be reached, and implementation is the doing of it.

Answer: B

Correct answer: Outcome of sale transaction

A double-win (win-win) sale is one where both sides are satisfied with the outcome - the customer has a product that genuinely meets the need, and the salesperson has a sale that will not be regretted. The point of the approach is that it produces repeat business and referrals, which a one-sided sale destroys.

Answer: B

Correct answer: Divide up

Grading is sorting a bulk of produce into groups of uniform quality or size - wheat by grade, eggs by weight. Doing so lets goods be bought and sold by description rather than by inspection, which is what makes commodity trading possible.

Answer: C

Correct answer: Controls

A marketing plan runs: executive summary, situation analysis (with the SWOT), objectives, strategy, action programmes, budgets and finally controls - the measures by which progress will be monitored and corrective action taken. The controls come last because they exist to check everything set out above them.

Answer: D

Correct answer: All of the above

A forecasting model has to be usable as well as accurate. It must be economical - worth more than it costs to run; the data it needs must be available; and it must be simple enough for the people who rely on it to understand and trust. An elaborate model fed by data nobody has is of no use.

Answer: C

Correct answer: David Ogilvy

David Ogilvy wrote it in Confessions of an Advertising Man (1963), and the point was that advertising which talks down to its audience fails. He is the archetype of the copywriter who insisted on research and on respect for the reader.